Tuesday, August 14, 2012

Fitch 'sensitive' to Wells Fargo's mortgage dominance

Fitch Ratings is "sensitive" to the market-dominating position Wells Fargo has in home mortgages, but it's not putting any pressure on the bank's credit rating yet, the ratings agency wrote in a credit analysis published Tuesday.

Wells is the nation's leader in mortgage origination and servicing, making 33 percent of loans and servicing 18.5 percent, according to data from Inside Mortgage Finance.

"While Fitch is increasingly sensitive to this concentration, there are no direct rating implications at this time," Fitch analysts wrote. "Given its size in the market, WFC will likely remain the focus of regulatory, political, and legal scrutiny."

Fitch did note that there is little likelihood of a credit upgrade in the near future. Wells is already ahead of most of its peers.

The credit analysis was overall positive, also discussing Wells Fargo's strong liquidity, earnings, cost of funding and capital position. It did say that nonperforming assets remain high comparative to regional banks.


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